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January 2, 2007

To our Customers:

As you may have seen in the media, a large snow and ice storm passed through parts of Kansas, Colorado and Nebraska, during the New Year Holiday weekend. This storm caused significant damage to the electric grid, particularly in central Nebraska, with more than 600 miles of high voltage transmission lines knocked out of service.

In its communications with its customers, the power company in Nebraska, along our main line stated that they have "experienced significant damage at every level from high voltage lines to individual services" and that it "may take days, weeks or even months to completely rebuild."

The primary effect on the railroad is the loss of power at public crossings and for our signal system. This means our throughput is reduced, as we have to operate fewer trains, more slowly than normal, and at some crossings we have to slow to 15 miles per hour before we can proceed through the crossings.

Our own procedures for winter storm operations have worked very well and we have deployed nearly 175 portable generators to power crossing mechanisms. We also have mobilized employees and equipment from other parts of the railroad to assist in the recovery efforts. The biggest impact has been on the coal line through Nebraska, where we have averaged about 10 trains per day fewer than normal since Sunday. Some manifest, intermodal and automotive trains have been diverted over the Sunset route and the remainder of our network is working well.

We believe our temporary repairs of the signal and crossing system will enable us to improve our train flow each day until the utility can restore full electrical service. Our current estimate is that it will be about two weeks before all routes are functioning at normal capacity.